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1 1 (February 25, 2022)

handle is hein.crs/govefip0001 and id is 1 raw text is: C o g e s o a R e s a r c S e r v i c S February 25, 2022 The U.S. DOT Disadvantaged Business Enterprise Program The Department of Transportation (DOT) Disadvantaged Business Enterprise (DBE) program seeks to offer small disadvantaged businesses a fair opportunity to compete for federally funded transportation contracts. Small disadvantaged businesses are small businesses that are owned and controlled by socially and economically disadvantaged individuals, and have been certified as such by the state where they wish to operate as a DBE. The program is implemented through DOT regulations published at Title 49, Parts 23 and 26, of the Code of Federal Regulations (C.F.R.). Program Purpose The DBE program aims to prevent discrimination against DBEs by providing them equal opportunity to compete for federally funded transportation contracts. Although DOT, like all executive agencies, establishes agency procurement goals for contracting with small disadvantaged businesses (P.L. 100-656), this program is distinct from that effort because it applies to the contracts awarded by state and local governments that receive DOT grant assistance. Funding for transportation projects flows through grant assistance, making the contracts awarded by grant recipients relevant to DOT policy. Program objectives related to ensuring non-discrimination include the following: * removal of barriers to the participation of DBEs in DOT-assisted contracts; * a level playing field on which DBEs can compete fairly for DOT-assisted contracts; * promotion of the use of DBEs in all types of federally assisted contracts and procurement activities conducted by grant recipients; and * development of firms that can compete successfully in the marketplace outside the DBE program. DBE Qualifications A DBE is defined by criteria from both Small Business Administration (SBA) and DOT regulations. A DBE must be (1) a for-profit small business, and (2) at least 51% owned by socially and economically disadvantaged individuals. A firm must also must be organized so that the disadvantaged individuals hold the highest positions in the company or, in the case of corporations, control the board of directors (49 C.F.R. §26.69, 49 C.F.R. §26.69, and 49 C.F.R. §26.71). To be a small business, a firm must: * meet SBA size standards, defined by the annual gross receipts or employee number caps outlined for each North American Industry Classification System code; and * have average annual gross receipts over the preceding three fiscal years that do not exceed $26.29 million (although the Federal Aviation Administration (FAA) Reauthorization Act of 2018 removed the gross receipts cap for FAA-assisted work). DOT set the gross receipts cap and adjusts it annually to account for inflation. To be considered socially and economically disadvantaged, a firm's owners must either demonstrate disadvantage or be presumed as such. DOT presumes social and economic disadvantage for citizens of the United States (or lawfully admitted permanent residents) who are women; Black Americans; Hispanic Americans; Native Americans; Asian- Pacific Americans; Subcontinent Asian Americans; or other minorities found to be disadvantaged by the SBA (49 C.F.R. §26.67). If not presumed disadvantaged by DOT, an owner must demonstrate social and economic disadvantage by meeting conditions explained in Appendix E to 49 C.F.R. Part 26. Note that the DOT definition of socially and economically disadvantaged differs from that of the SBA for its programs, found at 13 C.F.R. §124.1001. In addition to meeting the DOT definition of disadvantaged, each socially and economically disadvantaged owner must not have a personal net worth in excess of $1.32 million. The net worth cap excludes ownership interest in the owner's firm, equity in their primary residence, and assets held in vested pension plans, IRAs, 401(k) accounts, or other retirement savings or investment programs (49 C.F.R. §26.67(a)(2)). Program Origin and Guiding Goal Congress has regularly reauthorized the DBE program for highway and transit projects in surface transportation bills since 1983, most recently in the Infrastructure Investment and Jobs Act (P.L. 117-58). DBE programs for airport projects and airport concessionaires were authorized by the Airport and Airway Safety and Capacity Expansion Act of 1987 (P.L. 100-223). As early as 1969, DOT imposed a requirement on federal-aid highway construction projects to make their best effort to use minority-owned firms, and established a Minority Business Enterprise program through agency regulations in 1980. Since the first DBE program authorizing legislation in 1983, Congress has maintained a cumulative national goal of at least 10% contracting by DBEs where federal highway, transit, or airport project assistance is used. State and local transportation agencies that receive DOT grants are required to develop aspirational DBE contracting goals ittps://Crsreports.congress.gt

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